Graphite: Critical Mineral in U.S. Domestic Supply Chain
On February 24, 2021, U.S. President Joseph R. Biden signed a new Executive Order (EO) aimed at strengthening critical U.S. supply chains. The EO identifies three technology sectors as critical supply chains: advanced semiconductors, “high-capacity batteries, including Electric Vehicle (EV) batteries”, and pharmaceuticals. The EO also identifies “critical minerals and other… strategic materials” as a fourth supply chain, essential to technology manufacturing and the Defense Industrial Base. In addition to being a U.S. Government-listed Critical Mineral, graphite is an essential material for both the renewable and EV Battery sectors, and for advanced semiconductor manufacturing.
In Executive Order 13953 (September 30, 2020), referenced in the new Biden Administration EO, graphite was one of four minerals and metals singled out as essential to the U.S.’s “national security, foreign policy and economy.”
In December 2017, the U.S. Geological Survey released its Professional Paper 1802 titled “Critical Mineral Resources of the United States— Economic and Environmental Geology and Prospects for Future Supply”. A critical mineral is defined as a mineral:
(1) identified to be a nonfuel mineral or mineral material essential to the economic and national security of the United States;
(2) from a supply chain that is vulnerable to disruption; and,
(3) that serves an essential function in the manufacturing of a product, the absence of which would have substantial consequences for the U.S. economy or national security.
The report represented the U.S. Government’s most comprehensive assessment of the nation’s mineral resource profile and potential, serving to inform federal mineral policy. The report lists 23 metals and minerals that are critical to “the national economy and national security of the United States.”
Graphite is one of the 23 materials listed and is one of just four metals and minerals on the list for which the U.S. is 100% import dependent. The USGS study was followed by the signing of an EO entitled, “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals.” The EO directed the U.S. Secretaries of the Interior and Defense to prepare a list of critical minerals within 60 days, and to develop and report within 6 months a strategy for reducing foreign dependence on those metals and minerals deemed critical.
In response to the EO, the U.S. Government’s Critical Minerals List was published in May 2018 and includes flake graphite as one of the “Listed Minerals”. The report stated that graphite is:
- One of 14 Listed Minerals for which the U.S. is 100% import-dependent;
- One of 9 Listed Minerals meeting all 6 of the industrial/defense sector indicators identified by the U.S. Government report;
- One of 4 Listed Minerals for which the U.S. is 100% import-dependent while meeting all 6 industrial/defense sector indicators.
- One of 3 Listed minerals which meet all industrial/defense sector indicators – and for which China is the leading global producer and leading U.S. supplier.
The U.S Government’s Draft Critical Minerals List report on graphite states that “China is by far the largest producer of natural graphite, accounting for roughly two-thirds of world production. Only 4 percent of the world’s natural graphite comes from North America, with no U.S. production in decades. Although natural graphite was not produced in the United States in 2016, about 98 U.S. firms, primarily in the Northeastern and Great Lakes regions, consumed graphite in various forms from imported sources for use in brake linings, foundry operations, lubricants, refractory applications, and steelmaking. Graphite’s use in rechargeable batteries, as well as technologies under development (such as large-scale fuel-cell applications), could consume as much graphite as all other uses combined.”
U.S. Government Designates Graphite One Project as "High-Priority Infrastructure Project" ("HPIP")
The Federal Permitting Improvement Steering Council ("FPISC"), notifed the Company in its January 6th, 2021 letter, that the Graphite One Project had been designated a HPIP, qualifying under the "manufacturing" and "renewable energy" sectors. With this FPISC determination, Graphite One can elect to list the Graphite One Project on the Federal Permitting Dashboard should the Company choose to do so. The Federal Permitting Dashboard ensures that federal permitting agencies coordinate their project review authorities, resulting in a more efficient process, with more transparency for state agencies and the public. This designation does not remove any of the stringent environmental standards or permitting requirements necessary for the Graphite Creek Project and enhances Graphite One’s ongoing commitment to local stakeholders for a transparent and thorough permitting process.